Automobile Dealer Advertising

Advertising is going to be a very important part of your business no matter how small or large your dealership will be. As a dealer, you will now be required to follow strict Federal and State advertising guidelines. Federal advertising regulations require all dealers to disclose to their customers that they are a dealer and in the business of selling motor vehicles. Most states also require dealers to make several disclosures in all forms of advertising.

When you obtain your dealer license, gone are the days of advertising “For Sale by Owner”. You are no longer an “individual selling by owner”, you are going to be a licensed automobile dealer so you will now have to advertise as a dealer. Your customers need to know that you are a licensed dealer before the transaction takes place.

Many states require dealers to display the name of the dealership in every advertisement. Most states also require the dealer to state whether the vehicle that is being offered for sale is new or used. Advertising regulations usually require dealers to display all financing terms in the ad, such as the down payment required, length of time of the loan, all finance charges, and how much money is due at signing.

If you are advertising a sale you will need to display the beginning date of the sale, along with the end date of the sale. When you are advertising a specific vehicle, you will need to include the vehicle year, make, and model. Advertising terms such as “at cost” or a certain amount “above cost” are usually not allowed, because it is difficult to determine the dealer’s true net cost. Dealers are not allowed to advertise “Free” or “At No Cost” items if the customer is required to qualify for the free or at no cost item. For example, you may never run an advertisement for “Free Hot Dogs” then require a customer to take a test drive before they get free hot dogs. Free or at no cost items are always free or at no cost to everyone, regardless of their intent to purchase.

Also, if you run an ad that says you have 10 Harley Davidson motorcycles for sale, and sell 3 on the first day. You will need to update your ad stating that you now have 7 Harleys for sale.

You may never bring in customers under any type of false pretences.

Always remember any person on your lot could be an undercover officer from your State Police or Highway Patrol. Undercover officers routinely purchase cars from dealerships to make sure dealers are following all state guidelines. Remember to always stay compliant.

Dealer advertising regulations apply not only to your newspaper print advertising, but to radio advertising, television or cable advertising, and all types of internet advertising. If you are marketing vehicles in EBay, Craigslist, or your dealership’s own website, you
will be required to follow all advertising regulations. Dealers must clearly and conspicuously identify themselves in all advertising by use of the dealership name.

Bait and Switch Advertising

As a licensed motor vehicle dealer you must never, ever use bait and switch advertising. Bait and switch advertising comes in many forms and is illegal in all 50 states. Let’s say you advertise a 2009 Corvette and then sell it to the first person that visits your dealership after viewing the advertisement. The next person then comes in after the sale, wanting to see the same advertised vehicle. You must apologize for no longer having the advertised vehicle and tell the customer you will call them when you get an identical vehicle back into your inventory. Never, ever say” Well we sold the 2018 Corvette, but why don’t you take a look at this 2017 Maxima”. What you have done is “Bait” the customer in with an ad, then “Switch” them to a vehicle they have no interest in. This is one of several forms of Bait and Switch advertising that is illegal in all 50 states.

Running an advertisement for a vehicle that you do not have in your inventory is another form of Bait and Switch is advertising. When advertising a vehicle when your dealership possesses only one, or a limited number, then you must expressly state this in your advertisement. You may also never advertise a vehicle for a certain price, but only have vehicles available with higher cost options or with dealer ad on’s.

Contact your state dealer licensing bureau to make sure all of your advertising meets the state guidelines. Any violation of your state’s advertising guidelines could lead to the suspension or revocation of your dealer’s license.

Make Sure Your Dealer Advertising Is Compliant At All Times!